The variable overhead efficiency variance claims to measure
A) changes in spending efficiency.
B) productive efficiency.
C) changes in variable overhead costs because of the efficient (inefficient) use of the cost driver.
D) changes in variable overhead costs attributable to inefficient purchase of variable inputs.
E) None of these.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is used to measure the change in variable overhead costs due to the efficient or inefficient use of the cost driver. It is calculated by comparing the actual amount of the cost driver used to produce a unit of output with the standard amount of the cost driver that should have been used. Therefore, it measures productive efficiency and the optimal use of resources. The other options are not accurate descriptions of the variable overhead efficiency variance.

The Variable Overhead Efficiency Variance Claims to Measure